Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential
B. recessionary; higher; potential
C. recessionary; lower; lower
D. expansionary; higher; higher
Answer: A
You might also like to view...
A drug dealer earned $85,000 during a year by selling illegal drugs. His income will:
A) cause the GDP of his country to increase. B) not affect the calculation of his country's GDP. C) cause the GDP of his country to decrease. D) lead to an increase in his country's exports.
The economizing process (choosing from among alternatives to maximize benefits)
A) applies only to consumers. B) applies only to privately-owned firms. C) applies only to producers. D) is the same for producers as it is for consumers.
As the Federal Trade Commission currently interprets the Herfindahl-Hirschman index (HHI), an industry is considered to be moderately concentrated if the HHI value is
A) between 100 and 1,500. B) between 1,500 and 2,500. C) between 1,000 and 3,500. D) between 3,000 and 6,000.
When the rate of interest in the economy falls, there will be
A. an increase in nominal Gross Domestic Product (GDP). B. an increase in the market price of existing bonds. C. a decrease in the transaction demand for money. D. less investment by businesses.